AUD/USD Trades Cautiously Amid Expectations for Rate Hikes
The Australian Dollar is trading cautiously as expectations for rate hikes from both the Federal Reserve and the Reserve Bank of Australia (RBA) create a sense of uncertainty in the market.
The AUD/USD pair has been range-bound, with the Aussie holding within reach of its strongest level since May 14, at 0.7206.
Somewhat surprisingly, US economic data released on Tuesday failed to generate sustained selling pressure on the US Dollar, despite softer-than-expected readings in several key indices, including the ISM Manufacturing Purchasing Managers Index and the JOLTS Job Openings figure.
The FedWatch Tool indicates that traders see a 66% probability of a rate hike at the September 15-16 meeting, which may be contributing to the cautious trading in the AUD/USD pair.